Utility Sales Tax Exemption

Manufacturing and processing facilities often qualify for a sales tax exemption on the portion of their utilities used for production purposes. Our market research suggests that 1 out of every 3 eligible facilities are not taking advantage of this beneficial savings opportunity.

Nearly every state offering this tax exemption requires the taxpayer calculate the percentage of utility consumed by qualified production items at the facility. This consumption analysis is commonly referred to as a utility study. The utility study must be detailed and adhere to specific state requirements, including proper designation of equipment as exempt or taxable in accordance with statutory language.

Eligible States 

Exemption statutes are significantly different from state to state regarding the taxability of certain utility usage. Additionally, each state is unique in the documentation it requires to support the exemption claim. Limited exemption offering for Kentucky and Alabama.

TAX REFUND AND FUTURE SAVINGS 

Savings from the tax exemption occur in two ways. First, by filing an exemption certificate with the utility provider, the taxpayer no longer incurs the full sales tax charge on their utility invoices, resulting in savings each month into the future. Secondly, a refund may be claimed from the state for the sales tax paid on utility invoices for the last 3 to 4 years.

SPECIALIZED EXPERTISE TO HELP YOU CAPITALIZE 

B. Riley has the specialized expertise needed to help eligible clients capitalize on the utility sales tax exemption. Our utility tax specialists manage the entire exemption process for the client, from qualification to refund. The specialists perform the required utility study, collect all relevant documentation to support the exemption claim, communicate with state agencies and utility providers, and ensure the client is fully refunded all overpaid sales tax and properly setup for the exemption on future utility purchases. Additionally, each utility study and exemption claim are reviewed by a tax attorney and engineer to ensure compliance and accuracy.

In many cases B. Riley works on a contingency-fee basis, meaning the client owes nothing until savings are achieved through the exemption. Unique savings opportunities such as the utility sales tax exemption call for trusted experts with specialized experience. B. Riley has the expertise needed to diligently represent clients and achieve optimal savings through the exemption.

OUR PROCESS

1. Complimentary Review

The client's utility invoices for each location are analyzed to assess eligibility and determine the amount of savings achievable through the exemption. Upon completion of this review, a feasibility analysis is prepared and given to the client.

2. Utility Study

Specialists perform a detailed analysis of the client's utility usage at each location, determining the percentage of utility that qualifies for sales tax exemption.

3. Refund Filing

A request for refund of sales tax is submitted to the state for review and approval. B. Riley's experts communicate directly with the state to answer questions and ensure the client is fully refunded for all sales tax due.

4. Approval

Upon state approval, the client receives a lump-sum tax refund in the form of a check or credit to their utility accounts. An exemption certificate is filed for each utility account and the client is no longer charged sales tax on the exempt portion of their usage.

KEY CONTACT

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Kennedy White

ELIGIBLE STATES

Taxpayers with manufacturing or processing facilities located in the states below are eligible for the utility sales tax exemption.

Manufacturers and industrial processors with facilities located in Alabama may be eligible for a utility tax exemption. Alabama offers an exemption from utility gross receipts tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Alabama Code § 40-21-83 and 40-21-103

Exemption Language of Alabama Code § 40-21-83 and 40-21-103

Electricity when "used in an electrolytic or electrothermal manufacturing or compounding process." Natural gas when "used as a chemical raw material in the manufacturing or compounding process, but not as fuel or energy." Water when "50% or more is used in industrial processing."

Utility Study Requirement for Exemption Qualification

Utility studies are typically not allowed in Alabama. Instead, utility consumption must be separately metered. One of our representatives can help you assess eligibility of your usage and assist in the qualification process.

Alabama Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 4%

Average Local Sales Tax Rate: 5.22%

Helpful Resources

Alabama Utility Exemption Certificate: Form ST: EX-A1-SE

Alabama Utility Exemption Statute/Rule: Alabama Code § 40-21-83 and 40-21-103

Alabama Claim Form for Tax Refund: Petition for Refund

Manufacturers and industrial processors with facilities located in Arkansas may be eligible for a utility tax exemption. Arkansas offers an exemption from the full state sales tax rate on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Act 1411 of 2014.

Exemption Language of Act 1411 of 2014

"Sales of natural gas and electricity to a manufacturer for use directly in the manufacturing process will be taxed" at a sales tax rate of 0.625%.

Utility Study Requirement for Exemption Qualification

An Arkansas utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Arkansas Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 6.5%

Average Local Sales Tax Rate: 2.97%

Helpful Resources

Arkansas Utility Exemption Certificate: Form ET-186 A

Arkansas Utility Exemption Statute/Rule: Act 1411 of 2014

Arkansas Claim Form for Tax Refund: Application for Refund

Manufacturers and industrial processors with facilities located in Colorado may be eligible for a utility tax exemption. Colorado offers an exemption from state sales tax and some local taxes on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by C.R.S. §39-26-102(21).

Exemption Language of C.R.S. §39-26-102(21)

"The sale, use, storage, or consumption of electricity, coal, gas, fuel oil, steam, nuclear fuel, and coke... are exempt from sales and use tax when used for any of the following purposes: processing, manufacturing, mining, refining... and all industrial uses."

Utility Study Requirement for Exemption Qualification

A Colorado utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Colorado Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 2.9%

Average Local Sales Tax Rate: 4.75%

Helpful Resources

Colorado Utility Exemption Certificate: Form DR 1666

Colorado Utility Exemption Statute/Rule: C.R.S. §39-26-102(21)

Colorado Claim Form for Tax Refund: Claim for Refund - DR 0137B

Manufacturers and industrial processors with facilities located in Connecticut may be eligible for a utility tax exemption. Connecticut offers an exemption from state sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Conn. Gen. Stat. §12-412(3) & (16).

Exemption Language of Conn. Gen. Stat. §12-412(3) & (16)

"The sale, furnishing or service of gas, including bottled gas, and electricity when delivered to consumers through mains, lines, pipes or bottles for use... directly in agricultural production, fabrication of a finished product to be sold or an industrial manufacturing plant, provided the exemption under this subdivision (ii) shall only be allowed with respect to a metered building, location or premise at which not less than seventy-five per cent of the gas, including bottled gas, or electricity consumed at such metered building, location or premise is used for the purpose of such production, fabrication or manufacturing."

Utility Study Requirement for Exemption Qualification

A Connecticut utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Connecticut Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 6%

Average Local Sales Tax Rate: 0%

Helpful Resources

Connecticut Utility Exemption Certificate: CERT-115

Connecticut Utility Exemption Statute/Rule: Conn. Gen. Stat. §12-412(3) & (16)

Connecticut Claim Form for Tax Refund: Assignment of Retailer's Rights for Refund

Manufacturers and industrial processors with facilities located in District of Columbia may be eligible for a utility tax exemption. District of Columbia offers an exemption from sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by D.C. Code § 47-2005(11).

Exemption Language of D.C. Code § 47-2005(11)

Sales of natural or artificial gas, oil, electricity, solid fuel, or steam, directly used in manufacturing, assembling, processing, or refining of tangible personal property for sale or resale" are exempt from tax.

Utility Study Requirement for Exemption Qualification

A District of Columbia utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

District of Columbia Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 6.35%

Average Local Sales Tax Rate: 0%

Helpful Resources

District of Columbia Utility Exemption Certificate: Form OTR-308

District of Columbia Utility Exemption Statute/Rule: D.C. Code § 47-2005(11)

District of Columbia Claim Form for Tax Refund: Claim for Refund - FP-331

Manufacturers and industrial processors with facilities located in Florida may be eligible for a utility tax exemption. Florida offers an exemption from state sales tax and some local taxes on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by F.S. § 212.08(7)(ff).

Exemption Language of F.S. § 212.08(7)(ff)

Charges for electricity or steam used to operate machinery and equipment at a fixed location in this state when such machinery and equipment is used to manufacture, process, compound, produce, or prepare for shipment items of tangible personal property for sale, or to operate pollution control equipment, recycling equipment, maintenance equipment, or monitoring or control equipment used in such operations are exempt" ONLY INDUSTRIES: SIC 10, 12, 13, 14, 20, 22 - 39, and 212 and NAICS 423930.

Utility Study Requirement for Exemption Qualification

A Florida utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Florida Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 4%

Average Local Sales Tax Rate: 3.31%

Helpful Resources

Florida Utility Exemption Certificate: Florida Purchaser's Exemption Certificate for Electricity or Steam

Florida Utility Exemption Statute/Rule: F.S. § 212.08(7)(ff)

Florida Claim Form for Tax Refund: Application for Refund - DR-26S

Manufacturers and industrial processors with facilities located in Georgia may be eligible for a utility tax exemption. Georgia offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by O.C.G.A. § 48-8-3.

Exemption Language of O.C.G.A. § 48-8-3

"The sale and use of energy are exempt from sales and use tax if the energy is: (1) necessary and integral to the manufacture of tangible personal property and (2) sold, used, stored, or consumed at a manufacturing plant in Georgia."

Utility Study Requirement for Exemption Qualification

Georgia does not have a standard utility tax study requirement. Please contact us for more information regarding the requirements for claiming the exemption in Georgia.

Georgia Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 6%

Average Local Sales Tax Rate: 1.05%

Helpful Resources

Georgia Utility Exemption Certificate: Form ST-5M

Georgia Utility Exemption Statute/Rule: O.C.G.A. § 48-8-3

Georgia Claim Form for Tax Refund: ST-12 Claim for Refund

Manufacturers and industrial processors with facilities located in Indiana, may be eligible for a utility tax exemption. Indiana offers an exemption from state sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Ind. Code § 6-2.5-5.1(b).

Exemption Language of Ind. Code § 6-2.5-5.1(b).

"Transactions involving tangible personal property [including electrical energy, water, and natural gas] are exempt from the state gross retail tax if the person acquiring the property acquires it for direct consumption as a material to be consumed in the direct production of other tangible personal property in the person's business of manufacturing, processing, refining, repairing, mining, agriculture, horticulture, floriculture, or arboriculture."

Utility Study Requirement for Exemption Qualification

An Indiana predominant use study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Indiana Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 7.00%

Average Local Sales Tax Rate: 0%

Helpful Resources

Indiana Utility Exemption Certificate: Form ST-200

Indiana Utility Exemption Statute/Rule: Ind. Code § 6-2.5-5.1(b).

Indiana Claim Form for Tax Refund: GA-110L Claim for Refund

Manufacturers and industrial processors with facilities located in Iowa, may be eligible for a utility tax exemption. Iowa offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by I.A.C. 701-17.2.

Exemption Language of I.A.C. 701-17.2

"Receipts from the sale of tangible personal property which is to be consumed as fuel in creating power, heat or steam for processing, including grain drying or for generating electric current, shall be exempt from sales tax."

Utility Study Requirement for Exemption Qualification

An Iowa utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Iowa Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 6%

Average Local Sales Tax Rate: 0.94%

Helpful Resources

Iowa Utility Exemption Certificate: Exemption Certificate 31-113a

Iowa Utility Exemption Statute/Rule: I.A.C. 701-17.2

Iowa Claim Form for Tax Refund: IA 843 Claim for Refund

Manufacturers and industrial processors with facilities located in Kansas, may be eligible for a utility tax exemption. Kansas offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by K.S.A. 79-3602(dd).

Exemption Language of K.S.A. 79-3602(dd)

"Tangible personal property [including electricity, gas and water] which is essential or necessary to and which is used in the actual process of and consumed, depleted or dissipated within one year in the production, manufacture, processing, mining, drilling, refining or compounding of tangible personal property" is exempt from sales and use tax."

Utility Study Requirement for Exemption Qualification

A Kansas utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Kansas Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 6.5%

Average Local Sales Tax Rate: 2.18%

Helpful Resources

Kansas Utility Exemption Certificate: Exemption Certificate ST-28B

Kansas Utility Exemption Statute/Rule: K.S.A. 79-3602(dd)

Kansas Claim Form for Tax Refund: ST-33 Claim for Refund

Manufacturers and industrial processors with facilities located in Kentucky, may be eligible for a utility tax exemption. Kentucky offers an exemption from state sales tax and gross receipts tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Section 103 KAR 30:140.

Exemption Language of Section 103 KAR 30:140

"Taxpayer may claim exemption on the purchase of energy or energy-producing fuel if these costs "exceed 3 percent of the cost of production."

Utility Study Requirement for Exemption Qualification

A Kentucky utility tax study should list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Additionally, cost of production calculations are needed to determine whether the cost of energy exceeds 3% of the total cost of production.

Kentucky Statute of Limitations on Tax Refund

4 years

State Sales Tax Rate: 6%

Average Local Sales Tax Rate: 0%


Helpful Resources

Kentucky Utility Exemption Certificate: Application for Direct Pay 51A109

Kentucky Utility Exemption Statute/Rule: Section 103 KAR 30:140

Kentucky Claim Form for Tax Refund: Energy Exemption Annual Return

Manufacturers and industrial processors with facilities located in Maine, may be eligible for a utility tax exemption. Maine offers an exemption from state sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by 36 M.R.S. § 1760(9-D).

Exemption Language of 36 M.R.S. § 1760(9-D)

"The sale of all other fuel and electricity used at a manufacturing facility is 95% exempt from sales tax. The remaining 5% is subject to the general sales and use tax rate. In the dual-use context the customer must break down to the nearest 10% the taxable and nontaxable portions."

Utility Study Requirement for Exemption Qualification

A Maine utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption. A square footage analysis may also be appropriate in Maine.

Maine Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 5.5%

Average Local Sales Tax Rate: 0%

Helpful Resources

Maine Utility Exemption Certificate: Exemption Certificate ST-A-117

Maine Utility Exemption Statute/Rule: 36 M.R.S. § 1760(9-D)

Maine Claim Form for Tax Refund: Go to utility provider for refund.

Manufacturers and industrial processors with facilities located in Maryland, may be eligible for a utility tax exemption. Maryland offers an exemption from state sales tax and some local taxes on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Md. Code Regs. 03.06.01.10(A).

Exemption Language of Md. Code Regs. 03.06.01.10(A)

"The sale of gas, electricity, steam, oil, or coal, consumed directly and predominantly in a production activity… is not subject to tax."

Utility Study Requirement for Exemption Qualification

A Maryland utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Maryland Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 6%

Average Local Sales Tax Rate: 0%

Helpful Resources

Maryland Utility Exemption Certificate: Form SUT206

Maryland Utility Exemption Statute/Rule: Md. Code Regs. 03.06.01.10(A)

Maryland Claim Form for Tax Refund: SUT205 Refund Application

Manufacturers and industrial processors with facilities located in Massachusetts, may be eligible for a utility tax exemption. Massachusetts offers an exemption from state sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Mass. G.L. 64H § 6(i).

Exemption Language of Mass. G.L. 64H § 6(i)

"The sale of gas, steam, or electricity in an industrial plant area exempt if used in the actual manufacture of tangible personal property to be sold. This exemption applies only if 75% or more of the utility consumed at a metered location is consumed either directly in the manufacturing process or in heating an industrial plant in which a manufacturing process takes place."

Utility Study Requirement for Exemption Qualification

A Massachusetts utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Massachusetts Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 6.25%

Average Local Sales Tax Rate: 0%

Helpful Resources

Massachusetts Utility Exemption Certificate: Exempt Use Certificate Form ST-12

Massachusetts Utility Exemption Statute/Rule: Mass. G.L. 64H § 6(i)

Massachusetts Claim Form for Tax Refund: Go to utility provider for refund.

Manufacturers and industrial processors with facilities located in Minnesota, may be eligible for a utility tax exemption. Minnesota offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Minn. Admin. Rule 8130.5500(4a).

Exemption Language of Minn. Admin. Rule 8130.5500(4a)

"The purchase of fuel, electricity, gas, steam and water that is used or consumed directly in agricultural or industrial production is not taxable."

Utility Study Requirement for Exemption Qualification

A Minnesota utility tax study must list every piece of equipment used for production purposes and the annual consumption of each. The consumption of the production equipment is then compared to the actual utility consumption over 12 months to identify the exemption percentage. The State also allows a meter read method and meter disk method. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Minnesota Statute of Limitations on Tax Refund

3.5 years

State Sales Tax Rate: 6.875%

Average Local Sales Tax Rate: 0.58%

Helpful Resources

Minnesota Utility Exemption Certificate: Form ST3 Certificate of Exemption

Minnesota Utility Exemption Statute/Rule: Minn. Admin. Rule 8130.5500(4a)

Minnesota Claim Form for Tax Refund: Refund Request Form ST11

Manufacturers and industrial processors with facilities located in Mississippi, may be eligible for a utility tax exemption. Mississippi offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Miss. Code Ann. § 27-65-107.

Exemption Language of Miss. Code Ann. § 27-65-107

"Sales of electricity, current, power, steam, coal, natural gas, liquefied petroleum gas or other fuel to a manufacturer, customer processor…" are exempt from sales tax."

Utility Study Requirement for Exemption Qualification

Mississippi does not have a standard utility tax study requirement. Please contact us for more information regarding the requirements for claiming the exemption in Mississippi.

Mississippi Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 7%

Average Local Sales Tax Rate: 7%

Helpful Resources

Mississippi Utility Exemption Certificate: Affidavit for Utility Exemption

Mississippi Utility Exemption Statute/Rule: Miss. Code Ann. § 27-65-107

Mississippi Claim Form for Tax Refund: N/A

Manufacturers and industrial processors with facilities located in Missouri, may be eligible for a utility tax exemption. Missouri offers an exemption from state sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Section 144.054, RSMo.

Exemption Language of Section 144.054, RSMo

"Electrical energy and gas, whether natural, artificial, or propane, water, coal, and energy sources, chemicals, machinery, equipment, and materials used or consumed in the manufacturing, processing, compounding, mining, or producing of any product, or used or consumed in the processing of recovered materials, or used in research and development related to manufacturing, processing, compounding, mining, or producing any product" is exempt from state sales tax, but not local."

Utility Study Requirement for Exemption Qualification

A Missouri utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption. A square footage analysis may also be appropriate in Missouri.

Missouri Statute of Limitations on Tax Refund

10 years

State Sales Tax Rate: 4.225%

Average Local Sales Tax Rate: 3.96%

Helpful Resources

Missouri Utility Exemption Certificate: Exemption Certificate Form 149

Missouri Utility Exemption Statute/Rule: Section 144.054, RSMo

Missouri Claim Form for Tax Refund: Claim Form 472P

Manufacturers and industrial processors with facilities located in Nebraska, may be eligible for a utility tax exemption. Nebraska offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by REG-1-089.01.

Exemption Language of REG-1-089.01

"The sale purchase, use, or other consumption of electricity, coal, gas… may be exempt from sales and use tax if more than 50% of the amount purchases is used or directly consumed in processing, manufacturing, refining generation of electricity, irrigation or farming."

Utility Study Requirement for Exemption Qualification

A Nebraska utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Nebraska Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 5.5%

Average Local Sales Tax Rate: 1.43%

Helpful Resources

Nebraska Utility Exemption Certificate: Energy Source Exemption Form 13E

Nebraska Utility Exemption Statute/Rule: REG-1-089.01

Nebraska Claim Form for Tax Refund: Claim for Refund Form 7

Manufacturers and industrial processors with facilities located in New York, may be eligible for a utility tax exemption. New York offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by 20 CRR-NY 528.22.

Exemption Language of 20 CRR-NY 528.22

"Fuel, gas, electricity, refrigeration and steam and gas, electric, refrigeration and steam service of whatever nature is exempt from the sales and compensating use tax when used directly and exclusively in the production, for sale, of tangible personal property, gas, electricity, refrigeration or steam by one of the following endeavors: manufacturing; processing; assembling; generating; refining; mining; or extracting."

Utility Study Requirement for Exemption Qualification

A New York utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

New York Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 4%

Average Local Sales Tax Rate: 4.52%

Helpful Resources

New York Utility Exemption Certificate: Exempt Use Certificate ST-121

New York Utility Exemption Statute/Rule: 20 CRR-NY 528.22

New York Claim Form for Tax Refund: Application for Refund AU-11

Manufacturers and industrial processors with facilities located in North Carolina, may be eligible for a utility tax exemption. North Carolina offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by G.S. 105-164.13(57).

Exemption Language of G.S. 105-164.13(57)

"The following is exempt from sales tax: "Fuel, electricity, and piped natural gas sold to a manufacturer for use in connection with the operation of a manufacturing facility. The exemption does not apply to the following: a. Electricity used at a facility at which the primary activity is not manufacturing. b. Fuel or piped natural gas that is used solely for comfort heating at a manufacturing facility where there is no use of fuel or piped natural gas in a manufacturing process."

Utility Study Requirement for Exemption Qualification

North Carolina does not have a standard utility tax study requirement. Please contact us for more information regarding the requirements for claiming the exemption in North Carolina.

North Carolina Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 4.75%

Average Local Sales Tax Rate: 2.22%

Helpful Resources

North Carolina Utility Exemption Certificate: Certificate of Exemption E-595E

North Carolina Utility Exemption Statute/Rule: G.S. 105-164.13(57)

North Carolina Claim Form for Tax Refund: E-588 Claim for Refund

Manufacturers and industrial processors with facilities located in Oklahoma, may be eligible for a utility tax exemption. Oklahoma offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by OAC 710:65-13-150.1(b).

Exemption Language of OAC 710:65-13-150.1(b)

"Purchases by a manufacturer of tangible personal property or services for use in a manufacturing operation are exempt from sales and use taxes in Oklahoma...Examples of production supplies include items used in the production process, such as... Coal, fuel, oil, electricity, natural gas, artificial gas, steam and refrigeration, when used in the production process or when used to generate power or to create or maintain a temperature necessary for the production process."

Utility Study Requirement for Exemption Qualification

An Oklahoma utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Oklahoma Statute of Limitations on Tax Refund

Cannot claim a refund unless taxpayer correctly filled out their Packet M exemption and failed to properly file with the utility provider or the utility provider failed to exempt the account.

State Sales Tax Rate: 4.5%

Average Local Sales Tax Rate: 4.44%

Helpful Resources

Oklahoma Utility Exemption Certificate: Packet M for Oklahoma Manufacturers

Oklahoma Utility Exemption Statute/Rule: OAC 710:65-13-150.1(b)

Oklahoma Claim Form for Tax Refund: Form 13-9 Application for Refund

Manufacturers and industrial processors with facilities located in Pennsylvania, may be eligible for a utility tax exemption. Pennsylvania offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by 61 Pa. Code § 32.32 and 32.25.

Exemption Language 61 Pa. Code § 32.32 and 32.25

"The purchase or use of tangible personal property or services performed thereon by a person engaged in the business of manufacturing or processing is exempt from tax if the property is predominantly used directly by him in manufacturing or processing operations." "The purchase of ... electricity by a person engaged in the business of manufacturing, processing, farming, dairying, printing, mining... may require apportionment between taxable and exempt use if a portion of the purchase is used directly in one or more of these business operations."

Utility Study Requirement for Exemption Qualification

A Pennsylvania utility survey must list every piece of equipment used for production purposes and the annual consumption of each. The consumption of the production equipment is then compared to the actual utility consumption over 12 months to identify the exemption percentage. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Pennsylvania Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 6%

Average Local Sales Tax Rate: 0.34%

Helpful Resources

Pennsylvania Utility Exemption Certificate: Exemption Certificate REV-1220

Pennsylvania Utility Exemption Statute/Rule: 61 Pa. Code § 32.32 and 32.25

Pennsylvania Claim Form for Tax Refund: Petition for Refund REV-65

Manufacturers and industrial processors with facilities located in South Carolina, may be eligible for a utility tax exemption. South Carolina offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by South Carolina Code § 12-36-2120(19).

Exemption Language of South Carolina Code § 12-36-2120(19)

"Electricity used by cotton gins, manufacturers, miners, or quarriers to manufacture, mine, or quarry tangible personal property for sale" is exempt from sales tax."

Utility Study Requirement for Exemption Qualification

A South Carolina utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

South Carolina Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 6%

Average Local Sales Tax Rate: 1.46%

Helpful Resources

South Carolina Utility Exemption Certificate: Exemption Certificate ST-10

South Carolina Utility Exemption Statute/Rule: South Carolina Code § 12-36-2120(19)

South Carolina Claim Form for Tax Refund: Claim for Refund ST-14

Manufacturers and industrial processors with facilities located in Tennessee, may be eligible for a utility tax exemption. Tennessee offers an exemption from local sales tax and a reduction in state sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Tenn. Code Ann. S 67-6-206(b).

Exemption Language of Tenn. Code Ann. S 67-6-206(b)

"Tennessee authorizes manufacturers to purchase gas, electricity, fuel oil, coal and other energy fuels at a reduced sales and use tax rate and in certain circumstances to purchase such substances entirely exempt from tax. (b)1 imposes a 1.5% sales and use tax rate on a manufacturer's purchase and use of such substances. b(3) fully exempts these substances from tax if the manufacturer can establish (by separate metering) they are used exclusively in the direct manufacturing process."

Utility Study Requirement for Exemption Qualification

To qualify for the reduced sales tax rate of 1.5%, the manufacturing process must be described in detail and all applicable equipment must be documented. To qualify for the full exemption, the utility consumption must be separately metered.

Tennessee Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 7%

Average Local Sales Tax Rate: 2.53%

Helpful Resources

Tennessee Utility Exemption Certificate: Energy Fuels Exemption Application RV-F1303101

Tennessee Utility Exemption Statute/Rule: Tenn. Code Ann. S 67-6-206(b)

Tennessee Claim Form for Tax Refund: Claim for Refund RV-F1403301

Manufacturers and industrial processors with facilities located in Texas, may be eligible for a utility tax exemption. Texas offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Texas Admin. Code Rule §3.295 (c)(5).

Exemption Language of Texas Admin. Code Rule §3.295 (c)(5)

"Natural gas and electricity are exempted from sales and use taxes when sold for direct use in powering equipment that qualifies for exemption under Tax Code, Section 151.318 (Property Used in Manufacturing)."

Utility Study Requirement for Exemption Qualification

A Texas predominant use study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Additionally, the study must be signed by an engineer. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Texas Statute of Limitations on Tax Refund

4 years

State Sales Tax Rate: 6.25%

Average Local Sales Tax Rate: 1.94%

Helpful Resources

Texas Utility Exemption Certificate: Form 01-339

Texas Utility Exemption Statute/Rule: Texas Admin. Code Rule §3.295 (c)(5)

Texas Claim Form for Tax Refund: Claim for Refund

Manufacturers and industrial processors with facilities located in Utah, may be eligible for a utility tax exemption. Utah offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Utah Code § 59-12-104(39).

Exemption Language of Utah Code § 59-12-104(39)

"Sales of natural gas, electricity, heat, coal, fuel oil, or other fuels for industrial use" are exempt from sales and use tax."

Utility Study Requirement for Exemption Qualification

A Utah utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Utah Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 6.1%

Average Local Sales Tax Rate: 1.08%

Helpful Resources

Utah Utility Exemption Certificate: Exemption Certificate TC-721

Utah Utility Exemption Statute/Rule: Utah Code § 59-12-104(39)

Utah Claim Form for Tax Refund: Application for Refund TC-62PR

Manufacturers and industrial processors with facilities located in Vermont, may be eligible for a utility tax exemption. Vermont offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by 32 V.S.A. § 9741(34).

Exemption Language of 32 V.S.A. § 9741(34)

"Sales of electricity, oil, gas, and other fuels used directly or indirectly in manufacturing tangible personal property for sale" are exempt from tax."

Utility Study Requirement for Exemption Qualification

A Vermont utility tax study should list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. A square footage analysis may be appropriate in Vermont, unless floor space does not accurately reflect usage. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Vermont Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 6%

Average Local Sales Tax Rate: 0.22%

Helpful Resources

Vermont Utility Exemption Certificate: Form S-3F Exemption Certificate

Vermont Utility Exemption Statute/Rule: 32 V.S.A. § 9741(34)

Vermont Claim Form for Tax Refund: Application for Refund REF-620

Manufacturers and industrial processors with facilities located in Wisconsin, may be eligible for a utility tax exemption. Wisconsin offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Wis. Stats. § 77.54(30)(a)6.

Exemption Language of Wis. Stats. § 77.54(30)(a)6

"Fuel and electricity consumed in manufacturing tangible personal property, or items or property under s. 77.52 (1) (b) or (c), in this state."

Utility Study Requirement for Exemption Qualification

A Wisconsin utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Wisconsin Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 5%

Average Local Sales Tax Rate: 0.46%

Helpful Resources

Wisconsin Utility Exemption Certificate: https://www.revenue.wi.gov/DORForms/s-211f.pdf

Wisconsin Utility Exemption Statute/Rule: Wis. Stats. § 77.54(30)(a)6

Wisconsin Claim Form for Tax Refund: Refund Claim Form BCR

Manufacturers and industrial processors with facilities located in Wyoming, may be eligible for a utility tax exemption. Wyoming offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by W.S. 39-15-105 (a)(iii)(D).

Exemption Language of W.S. 39-15-105 (a)(iii)(D)

"Sales of power or fuel to a person engaged in manufacturing, processing, or agriculture when the same is consumed directly in manufacturing, processing, or agriculture."

Utility Study Requirement for Exemption Qualification

Wyoming provides that exempt purchases of power or fuel must be separately accounted for by separate metering, storage, or engineered calculation. Therefore, the most practical option is a detailed utility study listing every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Wyoming Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 4%

Average Local Sales Tax Rate: 1.34%

Helpful Resources

Wyoming Utility Exemption Certificate: Wyoming Exemption Certificate

Wyoming Utility Exemption Statute/Rule: W.S. 39-15-105 (a)(iii)(D)

Wyoming Claim Form for Tax Refund: N/A

State Utility Tax Exemptions Form

State Utility Tax Exemptions

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